Commentary

Aid Is Power. Of Course The BRICS Got In On The Act

At their summit on Wednesday of last week, the BRICS nations (or the “emerging economies” of Brazil, Russia, India, China, and South Africa) announced the founding of a new international development bank. This new financial institution will, like the World Bank, provide funding for infrastructure projects throughout the developing world and, like the IMF, use reserves of various currencies to stave off financial crises.

The founding of this new bank is largely the result of the BRICS nations’ discontent with the often disproportionate power allotted to the US and European nations within the internal mechanism of the World Bank and IMF. At the moment, for instance, Brazil and Spain have similar voting shares within the IMF (which are officially determined based on the size of a given nation’s economy using figures like GDP), despite the fact that the Spanish economy is less than two-thirds the size of the Brazilian. Dr. Roslyn Fuller suggests, and  rightfully so, that this new bank is the inevitable manifestation of the West’s inability to adapt to the new multipolar world, or in her words, the result of its failure to turn at this crucial turning point in global relations.

Obviously, there is a deeply geopolitical element to the founding of this new BRIC development bank. In large part, like much in the arena of diplomacy, it is a matter of ego – an opportunity for the BRICS countries to declare independence from and comparable influence to the old bastions of power in Washington, D.C. [Ed: My old foreign policy professor would call it “symbolic politics”].

The India Times refers to the new bank as a “counter-weight” to the World Bank. Reuters’ story on the topic declares in its title that “BRICS set up bank to counter Western hold on global finances.” The LA Times writes that the new bank was founded with “aspirations to challenge the dominance of the World Bank and the International Monetary Fund.”

This adversarial depiction of these two banks common to many media outlets the world over has likely left some of us development interns scratching our heads. After all, isn’t the fundamental goal of the World Bank to combat global poverty, not to preserve any uneven global power structures nor propagate US dominance? Shouldn’t this new bank be welcomed as a dearly needed partner and ally of the DC based financial institutions?

World Bank President Jim Yong Kim would most certainly agree. In a South China Morning Post article he is quoted as saying,

“For us, our competition is poverty. Our enemy is lack of economic growth…. We have no choice but to welcome any new entrants because every new entrant will help us battle poverty.”

Kim said he was eager to collaborate with this new bank in joint efforts to better aid the world’s poor.

Again we are faced with the problem of perceiving and interpreting the place of politics in development work. As William Easterly noted in his most recent book (echoing themes already present in works by James Ferguson and others prior), development organizations tend to mystify the deeply ideological roots of their policy prescriptions and the subsequent political effects of such policies in technocratic rhetoric and claims of impartiality. In such a way the World Bank, an organization with a policy history that mirrors the ideological trends of its American host (such that neoliberal structural adjustment reforms became popular during the Reagan era), can be depicted as an impartial organization advocating empirically proven  policies. Many development interns and practitioners seem to get lost in the technocratic rhetorical haze and forget, or completely ignore, the political elements of this line of work.

However, when the BRICS nations founded their new international bank the global media was able to perceive this move as one with deeply political roots and implications.

The ability to distribute aid is a mark of power; even more so, the ability to determine the ideological character and political directions of this aid. The media is not hailing the bank as a new contributor in the fight against the common scourge of poverty, but a diplomatically complex assertion of growing power and international influence among BRICS nations.

One must turn to President Kim to hear the politically sterile, familiar discourse of “the global confrontation of poverty.” While development organizations have often succeeded in their efforts to appear apolitical, here his remarks stand in contrast to a mass of geographically diverse journalists, making his apolitical representation of the World Bank seem – quite candidly – illusory.

Political jostling and diplomatic hissy fits aside, I am eager to see what will come of this new development bank.

As former World Bank economist (and Nobel prize winner) Joseph Stiglitz indicates in his appearance on Democracy Now, this new bank will only expand investment within the “developing world” and encourage further efforts to stimulate economic growth therein. With reserves of over 3 trillion its seems China’s greater participation (and that of the other BRICS) in the development industry is long over due, and a serious opportunity to better meet the needs of the world’s poorest.

Further, this new bank, which will likely pull from demographic and geographic circles underrepresented in Washington, will expand the development policy debate to include previously unheard voices (essentially the goal of development blogs like this one and Why Dev). The familiar danger of “group think” among policymakers can perhaps be staved off through the inclusion of these new diverse contributors (especially since a voice on the international stage tends to be loudest when its orator has full pockets).

Of course there are also new dangers. We must be wary, as with the World Bank, of hidden political rationales embedded in what I am sure will be the technocratically defended policy proposals of this new development bank. Their foreignness to Western observers makes them no less likely to fall into the typically western pitfall of propagating their own cultural hegemony and privileging their own ways of being, thinking, and prospering in their policies.

In short, this new bank is a bit of a mystery. Its institutional history is only about to begin. Here’s to hoping its better than that of the World Bank.

Hell, if nothing else, maybe they’ll even give me job. No one else seems to be interested. 

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Experiences, Learning

The Age of Sustainable Development: What gets measured, gets managed

This is a series from our writers Holly Narey and Michelle Gonzalez Amador who are taking Jeffrey Sachs’ online course The Age of Sustainable Development. They will be sending out an update on the course every week. Click here for more on all our writers. Check this tag to see all posts on this topic.

Have you heard the phrase ‘what gets measured, gets managed’? Jeffrey Sachs has, apparently, and he is a big fan.

When talking about development projects in a wider context, it is hard to get a clear picture. Part of the reason of this is because most projects have such a small impact in the overall development framework. It is easy to have a pessimistic view when we remember the statistic which introduced us to this course: there are one billion people living in extreme poverty.

This one statistic, however, does not show the progress over time. In the 1980’s, for example, the World Bank calculated that a little more than half of the people n the developing world lived in extreme poverty. By 1990, it had gone down to 45%, and by 2010, around 20%.

Setting goals

Lesson 5 of the series focused on the importance of setting goals for development, using the Millennium Development Goals as an example.

Economic progress, Sachs echoed from Keynesian ideas, is not the permanent problem of the human race – given no important wars and no significant population increase, that is. The real problem lies in concentrating efforts for a particular goal. That is true achievement of the MDGs: an ambitious project to fight extreme poverty. They are clear goals for people to understand, to promote, and to use to urge governments to take serious action that could end extreme poverty. They may be ambitious, and to a certain point, onerous, but they serve the purpose of setting the ideal to help mobilize efforts that would otherwise be disperse. Beneath those eight, broad and ambitious goals, there are twenty one specific and quantified targets and sixty detailed indicators that have better allowed us to measure the progress made.

The story so far

Because of the unenforceable nature of the MDGs, efforts may be uneven or prioritized differently from country to country. For example, China’s remarkable economic growth is a big part of the success of reduction of poverty (MDG 1). However, more globalized achievements have been found in the steady decline of malaria and other tropical diseases.

The establishment of the MDGs has both propelled the scaling up of development projects, and also permitted us to identify the remaining challenges. These include:

  • Agriculture in Africa. The source of food supply for the continent faces many obstacles. Namely the low yield and the lack of funding to invest in better management for irrigation, good seeds variety, etc.
  • The lack of government investment in infrastructure. A particular issue in certain parts of the developing world, this leaves regions isolated, hindering trade and its spillovers.
  • High fertility rates. Not only does this pose a problem for urban-planners but also, in terms of food and other production, directly influencing the environment.
  • Food security. As broad as this is it continues to be one of the biggest challenges if poverty eradication wishes to be environmentally sustainable.

How to tackle poverty

Sachs makes an interesting three-pronged proposal to tackle poverty:

  1. Investing in GMOs. Sachs used the case of India’s green revolution in the 60’s to back this point up. Certainly a controversial topic, as GMO production is, to my knowledge, monopolized by MONSANTO. Sachs himself did not say it, but perhaps it is important to note that, for such an action to work, certain prerequisites need to be met, particularly concentrating research in solving specific agricultural challenges in poor regions, as opposed to general increase in food production.
  2. Official Development Assistance. Otherwise said, a temporary injection of funds for targeted investments so that a poor place can jump-start a process of sustainable growth. Highly contested by other experts, such as Easterly or Moyo, who’ve used Sach’s own love for hard data against himself by exposing the side-effects of Aid money in African countries, it is probably the most complex solution, for it involves political will and efficient management from the part of the receiver-country. Sachs argues that because of the inherent risks of borrowing money, such as debt-crisis, a financial grant could provide the initial investment a country needs to leave the poverty-trap. Sadly, it has been shown that certain countries have become dependent on AID money, in detriment of initiatives to mobilize their own resources.
  3. Practical interventions: specifically, the Millennium Villages. Implementation has always been a big issue for development practitioners. By designing such a project and applying the MDGs as a guiding principle, Sachs wished to understand through empirical evidence which where the hardest steps of implementation. In its eighth year, the extremely controversial Millennium Villages project has, Sachs argues, shown that it is possible to help mobilize a community. ‘By harnessing the energies of communities, with a little bit of help, best practices, etc. tremendous things can be achieved’ concluded Sachs. Probably the solution that concentrated more on explaining the project than on explaining the findings, it still gave a spot-on argument. Realizing the potential of social capital in each community can lead to high-impact beneficial changes in a development framework.

Lesson 5 has been the most controversial lesson thus far, exposing the personally biased ideas of the professor. Whatever the faults of Sachs and despite his many detractors, he has clearly held onto his vision of ending poverty sometime soon.

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Learning

Age of Sustainable Development: Introduction

This is a series from our writers Holly Narey and Michelle Gonzalez Amador who are taking Jeffrey Sachs’ online course The Age of Sustainable Development. They will be sending out an update on the course every week. Click here for more on all our writers. Check this tag to see all posts on this topic.

If you are passionate about international development, you’ve probably heard/read the name Jeffrey Sachs more times than you can count. Whether you disagree completely with his proposals or you absolutely adore his ideas and intend to follow his footsteps (see these Foreign Policy articles for overviews of Sachs’ view and his opponents’ views), reading him and judging is probably a given if you want to get into global development.

So, as a form of rite of passage from a development-curious person towards an opinionated development intern, we’ve (that is, Holly and Michelle) decided to take Sach’s new online course “The Age of Sustainable Development” on Coursera.

Part of what attracted me (Michelle) to the course was coherence. Sachs proposes a multidimensional approach for development and yet, he seemed unreachable for a regular student outside of the New York area. Joining the Coursera team shows commitment to the idea of trying to make education more accessible to people around the world, as one of the challenges within the societal dimension.

The course itself has a simple design. The lectures, split into manageable chunks of between ten to fifteen minutes, were interspersed with questions ensuring that any listener would remain focused. Each session is then followed by a quiz, that focuses on what should have been learnt from the lessons, along with building participants’ awareness of information tools such as gapminder.com or data.worldbank.org/indicator. The quiz is designed to encourage the use of both qualitative and quantitative skills, asking you to interpret graphic data and calculate possibilities. Finally, the course website has a forum feature, which allows you to create and respond to threads, opening the possibility of discussion on a particular topic of interest from the lesson with other users/students.

The first session was enjoyable. As enjoyable as looking at shocking statistics about the current state of affairs is, of course. It is true that some of the facts that were introduced were not new to us; however, they served to set the context we will be working on, in and outside the course. An example of the more well known facts with which he opens up the subject were:

  • 7.2 billion people currently inhabit the world, out of which more than 1 billion live in extreme poverty.
  • In a world with greater economic production, the population has risen alongside that – it more than tripled in the 20th century. We are expected to reach 8 billion people by 2024 or 2025.
  • Half of this expanding world population lives in cities, designed to support a certain(…ly far smaller) amount of people. By 2030 the percentage will rise to 70%. An important part of human development will thus depend on sustainable urbanization, smart cities, smart architecture, smarter technological systems, etc.
  • Misguided technological advancement can physically (i.e. environmentally) hurt the earth. Not only are the CO2 emissions affecting the ozone layer, but they affect the chemistry of the ocean, making its water more acidic. The way we put nitrogen based fertilizers into the soil, in such large amounts, changes the normal nitrogen cycle.

This definitely gives you something to think about…

But while all of the technical information was very informative there were two main ideas which showed why the course will be a great time investment. The first one being that Sustainable Development is not only analytical but also a normative for an ethical approach. What is a good society? From this basic question Sachs presents his idea about the triple-bottom-line approach, economy, society, and environment. And, of course, the list of words that compose the ‘development jargon‘ these days: socially inclusive, environmentally sustainable, good governance – the list goes on.

The second idea stems from all of the topics presented: at the essence of Sustainable Development is problem solving. A starting point towards defining sensible goals for a crowded, interconnected planet. This problem solving focus is strongly emphasised by Sachs.

If we keep these two ideas in mind while watching the video-lessons, we might actually be able to understand the concept of Sustainable Development objectively. Building on what is said (in, admittedly, Sachs’ well-known perspective) but without limiting ourselves to it.

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In the last decade ‘sustainability‘ has become a crucial consideration in crafting development policy. From the mega-conferences of the UN and the World Bank to the planning and evaluation documents of specific projects, ‘sustainable development’ is on the lips of development experts and amateur bloggers the world over.

A group of Fulani Pastoralists round a well in the Ferlo region of Senegal

It makes sense. Global climate change and natural resource shortages present perhaps the greatest obstacles to development in much of the world as well as challenge the continued feasibility of the ‘developed‘ life-style in the West. Wolfgang Sachs and his fellow development critics would argue the ecological consequences of development are of such a magnitude that they necessitate a re-evaluation of the Western model of growth oriented market capitalism as well as any efforts to export that model elsewhere with any development efforts. Sustainable development, he argues, is a term created to preserve development and the implicit model it bears, and not the globe’s dwindling natural resources.

He might point for instance to the World Bank’s 2008 Agriculture for Development report to support this claim. In describing the ecological challenges to agricultural development, it concludes,

“The solutions not to slow agricultural development – it is to seek more sustainable production systems”

Of course, aligning with Sachs leaves the empathetic practitioner in an awkward situation. Without global revolutionary social change, the Sachs argument leaves little room for any attempts at ameliorating the lives or livelihoods of the world’s poorest individuals.

A recent trip of mine to the Ferlo region of Senegal portrays this ecological challenge to development all too well.

The Ferlo portion of Northern Senegal is historically the stomping grounds of Senegal’s highly mobile pastoral herders (called generally the Fulbe or Fula). In the last few decades agriculturalists have slowly expanded into this semi-arid area, spurred on by both development organizations and the Senegalese government. Concurrent with that trend has been one of ecological degradation that is transforming this Sahelian strip between the Sahara and the lush grasslands of central Africa into an environment that looks much more like the latter than the former. Thus the Fulbe are struggling simultaneously with an increase in demand for, and a diminishing supply of, natural resources.

Further complicating the situation those new cultivators in the region are high privileged over the pastoralists, as agriculture is considered a main engine of economic growth. Agriculturalists are encouraged to claim new lands and expand cultivation. Pastoralists, under Senegalese land tenure laws, have been unable to make similar land claims, and have received only comparably minimal support from the development industry.

Clearly, something is wrong here. However, no easy alternative presents itself. One might argue not enough consideration has been given to sustainability and the current shortage of natural resources. By supporting agricultural as a means of development, we are further endangering a fragile environment as well as the people that have used it successfully for hundreds if not thousands of years. Alternatively, one could argue a halting of agricultural support would mean an abdication of one of development’s most powerful tools. Agricultural support might initiate wider economic growth in Senegal or help to reduce its need for food imports, thereby making the nation more food secure. While hurting the Fulbe and endangering the already ecologically weak region of the Ferlo are certainly not positive consequences of this development strategy, perhaps agricultural expansion is a necessary condition for development.

This brief portrait shows how crucial, and often unsettling, ideas of sustainability are in development tactics. Can development continue to march forward considering its ecological effects and challenges? Are these environmental effects a necessary and permissible condition for growth? How can we support poverty alleviation and still preserve our shared, and singular planet?

I would love to hear your thoughts.

Commentary, Platform

The Ecology vs #Globaldev Debate In Senegal

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Commentary, Platform

Managing Risk or Creating It? The Real Message Behind the 2014 World Development Report

This past Sunday, the World Bank released it’s 2014 World Development Report titled Risk and Opportunity: Managing Risks for Development. This report delves into the process of risk management, looking at how it should be conducted, what obstacles prevent people and societies from conducting it effectively, and how these specific obstacles should be overcome.

The theme of this years report will not come as a surprise to most, as ‘resilience’ is one of development’s sexiest new buzzwords. In the age of aid effectiveness, these concepts have massive appeal to donors because proactive and systematic risk management can help to build resilience and protect hard-won development gains (read: investments).

While on the surface the report focuses on preparing for, preventing, and mitigating risk, the real message that the World Bank hammers home is about creating an environment where people are less averse to taking risks. Many people may be baffled by this concept – why would we want to invest in risk management only to encourage more risk? Let’s follow the argument.

Under the leadership of Dr. Jim Yong Kim (the President), the World Bank has set out to transform risk management from being viewed as merely a control function to one that is more dynamic and responsive to change. When risk management is only focused on regulation and preventing potential losses, it results in missed opportunities day after day. In his forward to the report, Kim illustrates the link between risks and opportunities:

“Pursuing opportunities requires taking risks, but many people, especially the poor, are often reluctant to do so, because they fear the potential negative consequences. Failure to act can trap people in poverty, leaving them vulnerable to negative shocks and even less able to pursue opportunities that would otherwise improve their well-being”.

The report cites the example of farmers in Ghana and India whose access to rainfall insurance has encouraged them to take on risks in search of higher yields, such as increasing their investments in fertilizer, seeds, pesticides, and other inputs. Taking these risks has led to increased prosperity and other positive development outcomes. Conversely, Ethiopian farmers who lack access to risk management tools often choose not to use fertilizer because they fear drought and other potential shocks. They prefer to stash their money in a mattress for when the next dry spell comes, as opposed to investing in intermediate inputs

In many cases, the risk of inaction is often the worst option of all.

Illustrating the extent to which risk management can unlock constructive development opportunities is the first step towards changing the way people perceive risk, and how they strategize and execute risk management.

This past summer, Dr. Jim Yong Kim came to my work place (the North-South Institute) for a round-table discussion with key leaders of Canada’s private, academic, and third sectors. This was the first time that I really started thinking about risks and rewards in development. While the Bank’s 2014 report looks mostly at risk on the micro level, during the round-table discussion Dr. Kim mentioned that the Bank itself must become more bold and not be afraid to take risks to support projects that have the potential to transform a country or a region. While one of the key constraints in development may be an individual or nation’s aversion to risk, international development institutions and donors are equally guilty of this.

I think that part of the World Bank’s underlying strategy is that by changing the way institutions think about risk and risk management on-the-ground, it might lead them to adapt the way they approach risk internally. While a farmer may shy away from taking risks because they fear negative repercussions, a donor agency may not pursue a new project or strategy that has the potential to transform a country due to fear of resource waste, pressure to avoid fiduciary risks, or concern that the outcome will have negative effects on their reputation ( for more take a look at this ODI report).

Now, I’m not saying that international development agencies and donors should start taking crazy risks in search of massive rewards (à la Wall Street traders). That is simply not possible, especially due to the role that public opinion plays in development and foreign aid. However, I do think that we need to eliminate incentives to take part in excessive risk aversion if we want to see truly substantial and transformative change.

In my opinion, individuals, societies, and institutions could be doing a much better job at managing the trade-offs between risk, opportunity, and reward, and implementing effective risk management strategies will be the first step towards remedying this.

So what do you think? Do you agree that excessive risk aversion is hurting development? Do you think that implementing risk management strategies will actually encourage people to take “smart risks”? I’d love to hear your thoughts in the comments section!

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Learning, Platform

Community Driven Development & The Challenge of Governance

I recently attended a talk at The Hertie School in Berlin by the acclaimed political scientist Francis Fukuyama. Whether or not you agree with his famous ‘End of History’ thesis, it’s always interesting to hear from such a famous academic name.

The talk mostly focused on the importance of thinking about the implementation side of governance – what Fukuyama termed ‘public administration’. He also touched on an aspect of international development thinking over the last twenty years or so which I thought was very interesting.

He was using the example of various World Bank driven projects but never explicitly mentioned Jeffrey Sachs and his Millennium Development Villages while roundly criticising the methodology behind them. As most people interested in global development will know, yet another voice from development attacked Sachs recently in a scathing piece for the New York Times which documented a reporter’s increasing disillusionment with Sachs’ projects as she spent several years investigating them all over Africa. Sachs has long been the recipient of some fierce criticism from development academics (most notably Bill Easterly and Michael Clemens) and now, it would seem, lay-observers are coming to similar conclusions.

The question of governance in international development, Fukuyama argued, is a way for the development community to avoid talking about two things: democracy and government. Because of various historical and contextual issues with these terms have become tainted and subsequently euphemised. The anti-government movement in the West, the rise of NGOs as powerful domestic and international actors, the relative successes of authoritarian governments in accelerating development and the increasing globalisation and networked world we live in – all of these things have muddled the post Cold War picture of progress. I should note that Fukuyama neatly sidestepped mentioning his own most famous work while talking about these issues!

Regardless, this is an interesting point. Governance remains the most common way the international community refers to the proper management of large scale development – like health, education, combating corruption and most of the other Millennium Development Goals. Are development actors like international lending agencies and large NGOs actually worsening these issues by looking to go direct to the people they want to help and cutting out state or local governments?

Another recent fad in the development blogosphere has been the championing of direct cash transfer programmes (here is a good, if critical look at the topic from AidSpeak). While Economic researchers get all hot and heavy about the idea of development being as simple as handing out wodges of cash like Mario Balotelli at Christmas time, perhaps they should think about the infantilisation of institutions and structures that this system will almost certainly contribute to.

Are the short term gains of this set-up worth potentially crippling the very institutions that underpin the functioning developed states around the world?

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